Crocs Shares Soar on HeyDude Optimism. Is It Too Late to Buy the Stock?

Core Insights - Crocs' shares increased following a strong Q4 earnings report, with international sales driving growth and a positive outlook for the HeyDude brand in 2026 [1][5]. Financial Performance - Crocs brand sales rose by 1% to $768 million in constant currencies, with direct-to-consumer (DTC) revenue increasing by 5% to $475 million, while wholesale revenue decreased by 7% to $294 million [6]. - International sales grew by 14% to $332 million, contrasting with a 7% decline in North American revenue, which totaled $436 million [6]. - Overall revenue fell by approximately 3%, or 4% in constant currencies, to $958 million, outperforming earlier guidance of an 8% decrease [7]. - DTC revenue increased by about 5%, while wholesale revenue declined by nearly 15% [7]. - Gross margin contracted by 320 basis points to 54.7%, and adjusted earnings per share (EPS) decreased by 9% to $2.29, exceeding the EPS guidance of $1.82 to $1.92 [7]. Segment Performance - For the Crocs brand, DTC revenue grew by 6.1%, while wholesale revenue fell by 6.7%, leading to a total revenue growth of 0.8% [8]. - HeyDude's revenue dropped by 17% to $189 million, with DTC revenue remaining flat at $133 million and wholesale revenue plunging by 41% to $56 million due to inventory clean-up efforts [6]. - Total revenue for HeyDude declined by 16.9%, with wholesale revenue down by 40.5% [8]. Future Guidance - For 2026, Crocs anticipates a 1% increase in sales, with Crocs brand revenue expected to be flat to up 2%, while HeyDude revenue is projected to decline by 7% to 9% [8]. - The company is forecasting adjusted EPS between $12.88 and $13.35, compared to $12.51 in 2025 [8]. - For Q1, revenue is expected to decrease by 5.5% to 3.5%, with Crocs brand revenue projected to decline in the low single digits and HeyDude sales expected to drop by 18% to 16% [9].